Innovation Lessons Learned from US Bank

US Bank’s payments innovation team has learned how to overcome some major obstacles to innovation in large organizations.

The US Bank payments innovation group’s biggest challenge is epitomized by its workspace. The group churning out new solutions from some of the newest technologies changing payments, like biometrics, doesn’t work in anything resembling an advanced technology lab, with conceptualized workspaces meant to inspire creativity.

They work on the 16th floor of US Bank Plaza in Minneapolis in a typical corporate headquarters layout of cubicles and conference rooms. It’ not the Googleplex. It’s a bank. And innovating within that structure -- both the literal building and corporate organization of the country’s fifth largest bank -- has come with its some difficulties.

A practical example of both was getting wifi in the building where the team works, says Dominic Venturo, the bank’s chief innovation officer for payments services and head of the payments innovation team.

“Putting wifi in a bank is difficult to do because of the security concerns, and so first we had to get an exception, then we had to go about getting a pilot set up, then we had to get a version set up,” he relates. “That sounds so tiny, but it’s amazingly complex when dealing with such a large organization.”

Another example was getting the team set up on Mac computers. “It’s a Windows organization, so the IT stack, all of the software, security, patch management, all of that is completely operationalized for 67,000 employees running windows machines,” Venturo shares.

But working on mobile app development required some members of the team to work with Macs. So again the team had to work with the bank’s senior tech leaders to get an approval for Apple machines, and get policies and procedures revised to allow for Macs in the organization’s infrastructure.

Dominic Venturo, US Bank

Innovating and launching pilots with brand new technologies within a large corporate structure still has some challenges for Venturo and his team. But after seven years since its founding, the team has learned valuable lessons in collaborating with the rest of the bank; lessons that have helped smooth out and streamline processes for dealing with security, compliance and other barriers that banks face when trying to innovate.

“We’re charged with investigating almost everything new that comes up, whether it’s a new way of shopping that comes up, or interfacing with a new system or connecting with new API’s with a partner. But none of them has been approved by our security people, so everything that you need to do to navigate that minefield and make sure that you’re being safe and following guidelines is a big challenge,” says Ron Burns, senior product manager in the payments innovation team.

And the regulatory change that every bank is dealing with also impacts the team’s ability to execute, says Todder Moning, senior vice president and payments innovation director in the group. “Just because we’re the innovation group doesn’t mean that we get a pass on compliance,” he shares.

The team has three project managers that keep them up to date on the bank’s latest policy changes that affect their projects, and take more than a dozen training sessions each year on regulation and compliance to help them handle the challenge of compliance.

Education and Communication

The team now has processes in place that allow them to work more quickly without getting bogged down by these issues. “It has gotten much better,” Ken Beirne, vice president of payments innovation, shares. Past projects could take over a month to get new designs approved by compliance, he adds. With a new social media project he is starting on next month, Beirne was able to get an outside vendor approved and finished his business change and risk assessment in six weeks.

Back when the team first started working on new innovations for the bank’s payments businesses, they had a delivery time of 9-18 months from idea to pilot, Venturo recalls. Now they’ve been able to cut that down to eight weeks.

“We’re coming up with ideas in here and bringing them to pilot in the current year, whereas that had been completely unheard of in the work that we do,” Venturo explains.

Getting to this point has taken a lot of work in educating the rest of the payments organization about the work that the innovation team is doing. “When we started it was like every single time you had to start from square one [with each new project], and you weren’t always working with the same person. So you had to explain what you were doing, why it was relevant and how it could fit a business model,” Beth Gallagher, vice president of payments innovation, recollects. “I think that has changed because of the work we’ve done educating people and the success that we’ve had.”

A lot of that education is in keeping the rest of the organization up to date on what the team is working on. “It took a while to get the processes in place so that we could make sure that people knew in advance what it was that we were doing,” Venturo says. “That way we don’t wind up with people popping out of the woodwork trying to stop progress just because they weren’t aware of it. I mean it’s a natural reaction, you see something and it looks risky, and then you want to know what’s happening and try to control it.”

The team does monthly business reviews that provide summary information to the payments groups’ leaders, and audit and compliance teams, about what the innovation team is working on. Each of the the three payments business groups in the bank (retail payments, merchant processing and corporate payments) have an “innovation principal,” an executive that liaises with the innovation team and the business groups. The team meets bimonthly with the “principals” and go over business agendas and goals and how the innovation team’s work can support them.

The team’s successes, such as winning “mobile bank of the year” from Mobile Commerce Daily last year for improving its mobile banking app, also haven’t hurt in breaking down barriers to innovation. “We had to prove ourselves early on,” Venturo says.

“There’s still cultural changes that need to be addressed… but I think that we’re viewed differently now as an organization, and that’s fostered an even greater sense of not only pride, but also urgency within the the different business lines to jump on the opportunity to [work with the innovation team],” Brian Koehler, senior vice president and payments innovation director, says.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

Thanks Nate. That's a good point. We always talk about how big financial organizations can be more agile like the disruptors, but it will probably be a challenge for the disruptors to stay as agile as they are now as they start to grow into larger more complex organizations.

Cool story, Jon. The amount of passion and dedication it takes to get something like this off the ground explains the inertia in financial services. Also means that disruptors used to working in technology first and financial services second might not be able to transfer their culture to the financial business. Maybe that's a good thing.